23rd Congress of International Council of the Aeronautical Sciences, 8-13 September, 2002, Toronto, Canada
Paper ICAS 2002-6.9.4

A VALUE-BASED APPROACH FOR COMMERCIAL AIRCRAFT CONCEPTUAL DESIGN

J. Markish, K. Willcox
Massachusetts Institute of Technology, USA

Keywords: aircraft design, value, dynamic programming, flexibility, uncertainty

An analytical tool is presented to perform program-level valuation of commercial aircraft designs. The algorithm used expands upon traditional Net Present Value methods through the explicit consideration of market uncertainty and the ability of the firm to react to such uncertainty through real-time decision-making throughout the course of the aircraft program. The result is a quantification of value that can be used to make program-level design trades and to gain insight into the effects of uncertainty on a particular aircraft design.

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